PC car review looks in the wrong places

The government wants the Productivity ­Commission to give a preliminary view on how much taxpayers should continue to prop up the car industry, as soon as Christmas. There is certainly some urgency on the part of the car makers, who say they need “certainty" before they decide whether to keep their doors open or not.

But the Treasurer
Joe Hockey
and Industry Minister
Ian Macfarlane
have given the Productivity Commission’s review inadequate riding instructions.

One set aim of the review is to “ensure the ongoing viability of the automotive industry".

This is pre-emptive.

What if the best conclusion for Australia is not to have a car industry at all, or at least not one which can only survive with billions of dollars of taxpayer life support?

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Curiously, the Abbott government doesn’t seem to have asked the PC the question the Howard government posed of the previous car industry review: what arrangements would “improve the overall performance of the Australian economy’’.

This question would yield the answer that subsidies and handouts to one industry inevitably impose costs on others.